Costlier food items, especially vegetables and fruits, pushed inflation based on wholesale prices up to 5.7 per cent in March. The Wholesale Price Index (WPI) had hit a nine-month low of 4.68 per cent in February.

While vegetable prices rose 16.8 per cent (14.04 per cent), fruits were costlier by 17.19 per cent (15.79 per cent).

With the Consumer Price Index (CPI)-based inflation also at a higher-than-expected 8.31 per cent (8.03 per cent), there may be little scope for the Reserve Bank of India to cut policy rates in the near future, say economy watchers. Indications are that the RBI will stick to its tight policy stance.

Retail print

While rural retail inflation for March stood at 8.89 per cent (8.43 per cent), in urban areas it stood at 7.51 per cent (7.55 per cent). Core inflation came in slightly lower at 7.8 per cent against 7.9 per cent last month.

Food prices

Both WPI and retail inflation were fuelled by higher food prices.

In the case of WPI, food inflation shot up by 9.9 per cent in March from 8.12 per cent in February. For CPI, food inflation spiked to 9.1 per cent from 8.57 per cent. Food inflation is on account of a rise in the prices of potato, fruits and vegetables, onions and milk and eggs. The WPI-based inflation for January has now been revised upward to 5.17 per cent against the earlier estimate of 5.05 per cent.

(This article was published on April 15, 2014)
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